January 12, 2007

Google. Enron. Google. Enron.

Well, the latest issue of FORTUNE magazine finally hit newsstands yesterday, featuring Google as The Best Company in America to Work For. Maybe it's my growing skepticism about GOOG at $500 a share and my unbridled jealousy about Google employees getting free meals, free spa treatments and free doctor visits on location at the Googleplex in Silicon Valley, but here's a preposterously scary question to mull over during the weekend: Is Google the new Enron? Now, I'm not insinuating that there's any kind of financial shenanigans going on at Google, only that the valuation numbers at Google just are not adding up the way they once did.

As much as I love Google and wish the company all the best as it attempts to march past $500 per share, does it strike anyone that Google bears a striking resemblance to Enron in several key areas: a stratospheric stock price that nobody really questions; constant adulation by the media, consulting firms and Wall Street analysts for "innovation"; and the all-important front cover of Fortune factor. (At one point, FORTUNE named Enron as the "most innovative company in America" for six straight years!)

Anyway, the cover of FORTUNE magazine features a group of thin, wealthy and casually-dressed Google employees whooping it up and having fun, together with the headline: Google is the New #1. Just like Enron, Google has been touted as America's most innovative company year in and year out. Enron claimed to be an oil & gas company, but was really a big-time financial derivatives company. Google claims to be an Internet company, but is increasingly becoming a big-time advertising and media company.

OK, OK, maybe I'm overplaying this issue. (It's tough to be a contrarian these days!) But, ask yourself, when was the last time you actually clicked on one of those annoying text ads or bought anything from Google?

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Understanding Hewlett-Packard's innovation culture

Kevin Desouza, a faculty member at the University of Washington, recently visited HP Labs in Palo Alto, California in order to better understand the company's innovation processes. As Desouza points out, "the single most important enabler of innovation at HP is their history and culture of innovation. From the days of Hewlett and Packard, HP is a company that recognized the value of innovation throughout the organization. HP focuses on all aspects of innovation: product and service innovation; innovation in business models; cultural and organizational innovation."

In a wrap-up of his HP Labs tour on the Leveraging Ideas for Organizational Innovation blog, Desouza also provides an overview of the innovation portfolio approach, examines the role of collaboration within the innovation process, and explains the importance of having mature stage-gate processes to screen ideas and innovations.

[image: HP's first product]

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January 9, 2007

Has Sony regained its innovation mojo?

Let's face it, Sony has really dropped the ball lately when it comes to innovation. Initial reports from the Consumer Electronics Show in Las Vegas have been promising, though, as Destructoid (live blogging the show) points out. Sony has been inundated with innovation awards for its consumer electronics gadgetry:

"Not only was the SIXAXIS awarded by the National Academy of Television Arts and Sciences, Sony itself received the "Technology and Engineering Emmy Award"... In addition to this, Sony has also picked up the "CES Best of Innovations Award" for 2007, a "Sound and Vision's Editor's Choice Award" and "Digital Innovation Award" from the Digital Entertainment Group and a "20 Most Innovative Products Award" from PC World."

[image: Sir Howard Stringer delivering the keynote address at CES 2006]

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December 15, 2006

Microsoft and the future of innovation

Microsoft never seems to get any respect as an innovator within the technology sector. Things may be changing though, with the company redoubling efforts to bring innovations from the lab into the broader market. As Network World explains, Microsoft Research is fighting back against critics who claim that Microsoft consistently plays second fiddle to the likes of Apple and Google. Certainly, the massive brainpower assembled by Microsoft is impressive:

"Microsoft planted the seeds of innovation 15 years ago when it established what has become one of its most distinguishing features, Microsoft Research (MSR). The lab has spawned innovations seen today in products from Windows Vista to Exchange Server to Xbox 360.

MSR has grown from an idea to more than 700 researchers working out of five labs around the globe with a budget of more than $250 million. MSR incubates not only futuristic ideas but young minds, having hired 700 interns worldwide this year including 250 computer science PhD candidates in Redmond alone, which is roughly 21% of all the computer science PhD candidates in the United States. It’s a program Microsoft officials say is the world’s largest PhD. internship program for computer science.

The MSR staff, however, is not just computer scientists, it includes psychologists, sociologists, anthropologists and medical doctors who are tasked with pushing the envelope on state of the art technology as much or more than transferring their technology into new and existing Microsoft products.

If you're interested to learn more about what's next at Microsoft, you might want to check out another profile of Microsoft Research called Inside Microsoft's Labs.

[image: Microsoft Research head Rick Rashid with Bill Gates]

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December 12, 2006

Rick Wagoner and the future of General Motors

MIT World has uploaded a one-hour video of General Motors CEO Rick Wagoner speaking about leadership in the automotive industry:

"Rick Wagoner’s outlook is optimistic, in spite of the bumpy road General Motors has traveled recently. With MIT Sloan Dean Emeritus Glen Urban, he discusses GM’s aggressive recovery plans in response to $10 billion in losses last year, and his determination to regain the public’s trust and confidence in GM cars. Wagoner sees new global competition creating both challenges and opportunities. India and China have opened up markets “that this industry hasn’t seen ... since the 1930s, ‘40s and ‘50s.”

Wagoner also discusses GM's massive "legacy" costs as well as the company's bold new China strategy:

"After cutting thousands of jobs and negotiating with unions, GM will look “to grow in the right places.” For instance, the company has a unique partnership with a Shanghai auto corporation, and will soon be supplying 12% of China’s cars. In an aside, Wagoner mentions that the Chinese “insisted on the Buick brand” -- the last emperor drove a Buick, so it’s got a “good image” over there. This is in sharp contrast to American consumers for whom the Buick name has “become polluted.”

As always, MIT World has provided extensive show notes for the video. Flip forward to the 15-minute mark, to hear Wagoner describe the competitive threat from Asia (both Japan and China), and to the 30-minute mark, to hear Wagoner analyze the upside and downside of new hybrid technologies within the automotive sector.

[image: Rick Wagoner]

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December 11, 2006

The link between innovation and growth at Medtronic

For publicly-traded companies, the easiest way to establish a link between innovation and value added is by tracking the stock price of the company and simultaneously assessing the consensus Wall Street opinion about the growth perspectives for that stock. The faster the company is growing, the more likely that the company is coming up with innovative new products and services - and the more likely the stock price will be moving north.

Anyway, with that as backdrop, the current issue of Barron's features an interesting profile of Medtronic, which has been one of the most innovative companies in the medical device space. The company has been a long-time Wall Street darling; however, lately, analysts have been getting a bit worried that the company will no longer be able to sustain its impressive pace of growth. The company is still the market leader in pacemakers and implantable cardioverter defibrillators (i.e. ICDs) but this market segment could be reaching a saturation point in the U.S. Recognizing this fact, the company has ramped up its innovation initiatives, hopeful of finding new products to bring to market. According to Barron's, this strategy seems to be working:

"CEO Art Collins believes Medtronic can increase its sales and earnings at about a 15% yearly rate for the next five years. That would mean the Minneapolis-based company doubles revenues from the $11.3 billion shown in the fiscal year ended April 2006.

Medtronic has many shots at achieving those ambitions. Its sales of ICDs should thrive, thanks to innovations like wireless telemetry, which will let doctors monitor and treat patients wherever they might be - before patients land in the emergency room. As populations grow grayer, Medtronic should also see substantial growth in devices for managing other chronic diseases, of the spine, the pancreas and even the brain... "I think we are just scratching the surface now, says CEO Collins of the disease-management opportunities awaiting Medtronic."

Barron's is particularly enthusiastic about the next-generation wireless devices from Medtronic that will relay data through patients' BlackBerry devices, allowing them to go almost anywhere and remain under their doctors' care. (The title of the article is, appropriately enough, "Doctoring by BlackBerrry?")

Anyway, if you have any kind of interest in the future of health care, it's worth taking a look at some of the cool products on the way from Medtronic, as well as the company's new partnerships with biotech companies like Amgen and Genzyme. For more on the company's take on innovation, also be sure to check out the panel discussion featuring Stephen Oesterle of Medtronic at the recently-concluded FORTUNE Innovation Forum in New York City. What's interesting is that Medtronic views doctors not as "customers" for its devices, but as "partners."

[image: Art Collins of Medtronic]

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December 8, 2006

Follow the Other Hand to Magical Innovation

Without a doubt, magic is cool these days. In just the past six months, we've been treated to Hollywood films like The Illusionist, The Prestige and Woody Allen's Scoop, all of them with magic as a central part of the plot line. (The films also feature big-name actors and actresses like Scarlett Johansson, Edward Norton, Hugh Jackman, Christian Bale and Paul Giamatti.)

With that in mind, perhaps, the New York Times has called Andy Cohen's new book Follow the Other Hand - which combines a behind-the-scenes look at the world of magic along with insights about innovation and business strategy - a potential bestselling business book for 2007. The Business Innovation Insider reviewed the book back in September, intrigued by the premise that corporations can become more innovative by learning to think like magicians. Paul S. Brown of the New York Times agrees, suggesting that the book will teach you how to "create ideas out of nothing, solve impossible problems, and make it all seem effortless."

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Robert Iger of Disney: CEO of the Year

MarketWatch has named Robert Iger of Disney as the CEO of the Year for 2006, thanks in part to his commitment to innovation within the entertainment industry:

"With a blend of bold strokes and olive branches, in contrast to his predecessor's iron boot, Robert Iger has re-imagineered the Walt Disney Co.'s culture and reanimated its stock. Disney's $7 billion buyout of Pixar was just one of many moves in the past year that won plaudits for Iger. The company, formerly bogged down by board and shareholder discord, has emerged as an example of good corporate governance."

According to MarketWatch, the willingness to do the $7 billion Pixar deal was especially noteworthy and forward-looking:

"It may seem like an obvious, logical move now, but even those who work for Walt Disney Co. Chief Executive Robert Iger initially thought buying Pixar Animation Studios was a big gamble. When Iger pulled the trigger earlier this year on the $7.4 billion transaction, many in the entertainment industry questioned the wisdom of shelling out that much money for a company that puts out a single product once a year. Sure, Pixar had been wildly successful, scoring more than $3.6 billion in worldwide receipts, but it faces rising competition from other Hollywood studios.

Yet the move accomplished several tasks for Iger and Disney. It mended fences with Pixar chief Steve Jobs, who had grown weary of the mercurial Michael Eisner, Iger's predecessor. It also put in Disney's camp the animation specialist that had trumped its once-dominant position in the market. And it represented a symbolic but critical return to Disney's roots, seeming to quickly heal the deep divisions that ailed the entertainment giant."

[image: Disney CEO Robert Iger]

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November 21, 2006

The amazing innovation transformation of DuPont

Mr. McGuire: I want to say one word to you. Just one word.
Benjamin: Yes, sir.
Mr. McGuire: Are you listening?
Benjamin: Yes, I am.
Mr. McGuire: Plastics.

In the current issue of Barron's (link via Reuters), there's a great story about the transformation of DuPont from a traditional chemicals and plastics company into a rip-roaring biotech giant. (If Dustin Hoffman were to reprise his part in The Graduate, he would be given advice about "biotech," not "plastics"). Anyway, as Thomas G. Donlan of Barron's explains, a major impetus behind the innovation transformation at DuPont has been the active role played by Charles ("Chad") Holliday, the chairman and CEO of the company:

"Charles O. Holliday, CEO of DuPont, has been giving the same speech since becoming president in 1997 and CEO in 1998. His message: DuPont's cash cows - commodity chemicals and petroleum - are no longer giving enough milk. DuPont, he has said, would have to return to its roots as a science company and blaze new trails into the frontiers of biotechnology. [...]

The company, with a market value of $44 billion, is launching one new product after another and making a real mark in the realm of genetically modified seeds... All told, DuPont's shares probably have room to rise 15% to 20% over the next year. Longer term, each of DuPont's five major businesses has significant growth potential."

So how much is this new focus on innovation worth to the company? Well, the company's stock price was about $47.5 headed into the publication of the Barron's article. On Monday (the first day traders could digest the news and act on it), shares of the company skyrocketed to $48.25 before cooling back down to about $48 by the end of trading. Even the most bearish analysts on the Street think the company is worth $50 a share, and some of the more optimistic analysts think the company is worth $55 a share. Thus, the answer to the question: between five to ten points on the stock price, if not more.

ASIDE: DuPont CEO Charles Holliday will be among the speakers at the upcoming FORTUNE Innovation Forum.

[image: Charles Holliday]

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The Economist reviews four new books on innovation

In search of the best books about innovation and entrepreneurship, The Economist reviews four important new books that might make some good holiday reading for that innovator on your shopping list:

(1) Joe Ellis and the Creation of Xerox - "Chester Carlson's invention of xerography would never have become the hugely profitable Xerox photocopying business were it not for what Charles Ellis calls the “extreme entrepreneurship” of Joe Wilson."

(2) Mavericks at Work: Why the Most Original Minds in Business Win - "A pivotal work in the tradition of In Search of Excellence and Good to Great and featuring many of today's most interesting corporate rising stars. These are companies that blend the revolutionary zeal of the late 1990s dot-com era with an emphasis on values in a way that has set them apart from the ethical crisis gripping American business in the first years of this century."

(3) Outside Innovation - "Patricia Seybold focuses on the potential for using customers more in the innovation process... She does a decent job of justifying her Martin Lukes-esque subtitle, “How Your Customers Will Co-Design Your Company's Future”. Her case studies cover a number of web-based companies and are written up with even more breathless enthusiasm than those of Mr. Taylor and Ms. LaBarre (authors of Mavericks at Work)."

(4) The Entrepreneurial Imperative: How America's Economic Miracle Will Reshape the World (and Change Your Life) - "Mr Schramm, who, as head of the Ewing Marion Kauffman Foundation in Kansas City pays for a lot of research into the subject, argues that America needs to do more to maintain its entrepreneurial edge. At the same time, it must promote the American model abroad as the centerpiece of its foreign policy—the global spread of wealth being the best recipe for national security."

ASIDE: In case you're wondering just exactly who Martin Lukes is, it's an inside joke about a character that appears in the Financial Times on a regular basis. Patty Seybold, author of Outside Innovation, explains the Martin Lukes reference on her Outside Innovation blog:

"For those who aren't loyal readers of the Financial Times, Martin Lukes is the main character of a hilarious email soap opera that runs every Thursday in the FT. I admit to being an addict--so much so that on a recent Thursday on which the column was inexplicably missing from my edition of the paper, I was miffed all day. Martin Lukes is delightfully depicted (by his creator, Lucy Kellaway) as a complete fool and idiot. He is particularly prone to coining over-the-top terms like "creovation" and to sexist and boorish, insensitive behavior. His escapades never cease to delight and amaze!"

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November 9, 2006

Problems with the U.S. patent process

Information Week examines last month's patent spat between IBM and Amazon, viewing it as symptomatic of the broader flaws within the U.S. patent process. Critics maintain that the convoluted and murky patent process inevitably leads to a situation in which companies like IBM must apply a double standard when it comes to the protection of their intellectual property:

"Almost two years ago, IBM donated 500 software patents to the open source community, with a pledge that it would not enforce its license rights to the technologies. But the company remains fiercely protective of its vast portfolio of intellectual property, as Amazon.com learned when IBM filed a patent-infringement suit claiming the Internet retailer built its business using IBM-developed technology and processes. Welcome to the tortuous world of technology patents and intellectual property, where community-minded vendors share original ideas manifest as software code one day -- then bring the hammer down on suspected scofflaws the next."

Even IBM seems to be a bit bemused by its waffling on the intellectual property issue:

"IBM's top attorney for intellectual property rights acknowledges his company's position can seem contradictory and confusing. "We've referred to our patent policy as apparent schizophrenia," David Kappos says. Yet he maintains that "on a deeper level, our actions are consistent."

Apparently, IBM's patents include things like "storing data in an interactive network," "ordering items using an electronic catalog" and "presenting advertising in an interactive service." As The Guardian (U.K.) notes, attempting to defend these patents - all of which are fundamental to online commerce - is like imposing a hidden tax on online shopping.

[image: Thomas Edison's patent application for the light bulb]

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November 6, 2006

IBM gets a Second Life

The world of online gaming and virtual entertainment is growing in size on a daily basis, leading an increasing number of experts to believe that many advances and breakthroughs in areas such as health care, education and business could come from a better understanding of these virtual worlds. With that in mind, Irving Wladawsky-Berger, the Vice President of Technical Strategy and Innovation at IBM, joined the Second Life online community over the weekend. Below, he explains what IBM might learn from the brave new world of virtual gaming as it experiments with new IT applications:

"In the last couple of years I have become increasingly interested in 3rd generation user interfaces (3GUI) inspired by advanced gaming technologies such as those found in Microsoft's XBOX 360 and Sony's PS3. Over time I have become convinced that such highly visual, interactive interfaces will revolutionize the way people interact with IT applications of all sorts. I have also become convinced that such virtual world capabilities will profoundly transform business and related institutions in society. [...]

What a world it is! I have only been there a short time, and I have primarily explored the IBM sites my colleagues have built, but it is impressive how rich and innovative these virtual worlds are. While generally virtual worlds are inspired by and sort of look like the real worlds they represent, their appearance and behavior can be just about anything you want, limited only by the imagination of the designers. I can now appreciate how Alice must have felt in Wonderland.

My colleagues have built virtual world sites that replicate the IBM Hursley Labs in England and the Almaden Research Center in California. They are building a virtual Beijing Forbidden City. They are designing a set of conference centers devoted to business with our customers, public policy issues and internal collaborations. And they are creating meeting spaces for ex-IBMers and current employees to meet, catch up and even collaborate – part of a new alumni program called The Greater IBM Connection.

Multiply that kind of activity 100-fold, just in Second Life, and then factor in the many other virtual world sites that are either already in existence or under construction, and you get a picture of the innovative energy being unleashed by large numbers of people around the world. I think that what we are seeing is the evolution of the Internet and World Wide Web in incredibly important new directions. Foremost among them is a much more people-centric Web."

For more on IBM's Second Life initiatives, check out this Reuters clip, which explains how IBM became interested in virtual gaming. According to CNET, IBM is now hosting some employee meetings in Second Life.

[image: IBM in Second Life]

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October 26, 2006

How Novartis does innovation

In a one-hour video presentation for MIT World, Novartis Chairman and CEO Daniel Vasella explains the innovation process behind one of his company’s flagship pharmaceuticals, Gleevec. The discovery, development and marketing of this drug, which fights the rare chronic myeloid leukemia (CML), highlights some of the things Novartis does right. For example, during an important period of coordinating clinical trials and winning FDA approval for the drug, employees at Novartis volunteered to work in 24-hour shifts, seven days a week. In summarizing the success of the innovation process at Novartis, Vasella cites “intrinsic motivation in each Novartis staff member, high standards, savvy risk-taking and persistence in both research and marketing, and a company culture that brings out the best in everyone."

As always, MIT World provides excellent show notes for the one-hour presentation. There's also a brief bio sketch for Vasella and a short history of how Gleevec started out as an untested idea and emerged as a multi-billion-dollar blockbuster drug.

[image: Daniel Vasella of Novartis]

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Google's secret innovation formula

What is Google's secret formula for innovation success? According to Amy Rowell of Innovate Forum, it is the company's willingness to experiment with "wild, ambitious" ideas, while at the same time, understanding that failure can be a catalyst for innovation success. Also, it doesn't hurt that the company has created "a sort of playground for adults" to get the innovation juices flowing:

"Google is one of those companies that just seems to keep getting it right. But as even its management team will tell you, that’s in large part because it’s not afraid to get it wrong – at least some of the time. In fact, Google’s innovation process leaves plenty of room for experimentation and failure, and does so by having a rather novel workplace environment.

By design, Google’s product development environment is a sort of playground for adults. In a campus setting, Google employees can, for example, reportedly enjoy the benefits of an outdoor wave pool, an indoor gym, free meals and the use of company-provided scooters to transport them between buildings."

[image: Life in the Googleplex]

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October 25, 2006

Unisys wants you to appear on the cover of FORTUNE magazine

That is, if you're a tech-savvy C-level executive from a hugely successful U.S. corporation. In a free Wall Street Journal Online feature, Brian Steinberg describes a clever new advertising pitch from Unisys, in which the company is using the cover of FORTUNE magazine to sell its wares to some of the leading IT decision-makers in the country:

"Around 20 high-ranking executives at corporations such as Subaru of America, DHL, Citigroup and Northwest Airlines will get a surprise when FORTUNE magazine arrives on their desks this week. Each will find his or her own face gracing the cover. The covers are one-of-a-kind mock-ups wrapping the actual FORTUNE edition, part of an advertising ploy conducted by IT company Unisys that brings new meaning to the idea of niche marketing. Unisys is sending the magazines to get the attention of executives - mostly CIOs - responsible for making buying decisions about their companies' technology products and services. In other words, the people Unisys most wants to influence."

As Steinberg goes on to explain, the FORTUNE cover wraps are personalized to the needs of the particular corporate executive. Moreover, the company is placing outdoor signs and billboards in strategic locations that these executives might see, even going so far as to map out morning commutes in order to find the most advantageous locations.

In short, the new advertising initiative is based on influencing the influencers: "We're not trying to have grandma at home understand who we are and what we do. We're not even trying to have every business executive understand who we are and what we do. It's a very narrow set of executives that we really want to reach."

[image: Unisys trade show]

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October 24, 2006

From eggs and butter to interest rates and currencies

Responding to the proposed merger of the Chicago Mercantile Exchange and the Chicago Board of Trade, James Grant (editor of Grant's Interest Rate Observer) wrote a great op-ed piece for the Wall Street Journal called, provocatively enough, Innovate or Die. Innovation, quite simply, is the key to future success within the financial services industry.

Mention the Chicago Merc today, and you probably think of sophisticated financial derivatives and financial innovation. Yet, the Chicago Merc actually started out life in 1898 as the much humbler Chicago Butter and Egg Board, trading contracts on commodities such as butter, eggs and onions, Suffice it to say, the Chicago Merc in those days was well on its way to becoming a "relic of the Old Economy." By the 1950s, it was left with a single type of contract to trade - the egg contract - that was itself the subject of constant manipulation by traders. So what happened? The Chicago Merc decided to innovate its way to success:

"They picked innovation. The same government that had stamped out the butter and onion contracts proceeded to create new opportunities through inflation and monetary turmoil. The end of the Bretton Woods system of fixed exchange rates opened new vistas in currency trading. The Merc seized them as it more recently did the chance to develop markets in interest rates and equities...

The Merc didn't burst when the Nasdaq bubble did. Today, it is generating over $1 billion in annual revenues, up from $210 million in 1999. Its stock market capitalization tops $17 billion, a nice, neat 17-fold appreciation in value for the seat holders in less than seven years... Properly, the CME Group is the envy of the New York Stock Exchange and of brokers and dealers worldwide..."

[image: President Bush at the Chicago Merc]

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October 16, 2006

How Sony got disrupted

Michael Urlocker of the On Disruption blog has put together a comprehensive innovation case study of what went wrong at Sony, including numerous links to outside sources and articles that document the role of innovation at the company. According to Urlocker, the company fell victim to The Innovator's Dilemma. Unable to come up with disruptive innovations of its own, the company was instead blindsided by a number of recent market developments in areas such as digital music.

For nearly 30 years, Sony was one of the leading innovators in consumer electronics:

"Sony was the great innovative company that invented technologies that defined innovation and pop culture from the 1950s through to the early 1980s with a string of new-market disruptive innovations... One way to look at this is to consider Sony as a serial disruptor that had little to lose in the early days. When Sony had no share of the U.S. radio business in the 1950s and no share of the TV business in the 1960s, Sony took chances, it innovated and it pursued what looked like small or marginal market opportunities to gain toeholds in the market."

That all changed, however, once the company began to dominate large markets. Of late, the company has been downgraded, delayed and disrupted:

"As Sony grew in the consumer electronics business and in the music business, Sony had a lot to lose. Hence in the past 20 years, Sony became a company more concerned with protecting and defending its dominant position and seeking proven large market opportunities. Largely, Sony did the right things that successful companies must do: It served its customers, it released better products and it did not compete against its cutsomers.

But as a result, there was less disruptive innovation and no appetite for potentially cannibalizing businesses, like the $1-a-song download business. After all, it is certainly not easy for a company that sells music to record stores to compete against those same customers with a direct-download business. But ignoring a threat does not make it go away. Sony left that disruptive innovation to a music-industry outsider: Apple and its iTunes service..."

[image: Sony trade show]

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Vodafone hangs up on innovation

In a restructuring move, Vodafone is shutting down its stand-alone New Business and Innovation Unit (NBIU) and folding some of these operations back into other operating units of the company:

"Vodafone has announced that it is axing its new business and innovation division and as a result of the restructuring, the unit’s CEO, Thomas Geitner, will quit the company. Vodafone has said that its new business and innovation unit (NBIU) will be absorbed back into the structure of the company and as a result of this, Geitner, who joined the company in 2000, will be leaving in December 2006. Vodafone had created the NBIU earlier this year in a restructuring process that also included dividing the business into two geographic regions. Under the terms of the latest initiative, the NBIU’s responsibilities in developing the mobile plus strategy will be devolved to the operating companies and to the European region. A group strategy and new business function will identify new business opportunities and key partners."

[image: Building 4 Vodafone]

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October 13, 2006

A Blue Ocean wrapped in brown paper

The Creating Blue Oceans blog consistently provides illuminating case studies of companies that are leveraging the power of Blue Ocean Strategy. Recently, Gabor George Burt highlighted the blue ocean thinking at Seattle-based Brown Paper Tickets:

"We were recently tipped to the exploits of Brown Paper Tickets which seems poised to take the event ticketing and distribution world by storm. Brown Paper Tickets enables even the smallest of merchants to become an event producer and ticket distributor. All one needs to do is plug in the event information and then direct people to the Brown Paper Tickets website to purchase a ticket. So if you are having a charity luncheon for ten people, or a concert for ten-thousand, Brown Paper Tickets can handle the entire ticketing and distribution process."

Brown Paper Tickets has also been profiled by Springwise, which explained how the company is fast becoming a "consumer- and vendor-friendly alternative to Ticketmaster." For example, Brown Paper Tickets offers buyers low ticketing fees ($0.99 per ticket plus 2.5% of the sale price), thereby enabling individuals, small businesses and nonprofit organizations to sell tickets to their events quickly and cheaply.

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October 3, 2006

60 years of innovation at Pilgrim's Pride

Usually, the word "innovation" connotes some type of world-changing technological innovation. Yet, innovation occurs within each and every industry in deceptively simple ways that can impact hundreds of millions of consumers. For example, Pilgrim's Pride - the company that came up with such innovations as the world's first-ever boneless whole chicken - is celebrating a 60-year history of innovation and thought leadership within the processed poultry industry:

"Over the years, Pilgrim's Pride has established a reputation for industry-leading innovation. It was one of the first in the poultry industry to produce individually quick-frozen cooked and fresh chicken products. In 1984, the Company developed the world's first boneless whole chicken. In 1997, after years of research into the role of certain vital nutrients in fighting heart disease and promoting wellness, the company introduced EggsPlus, a healthier alternative to the ordinary egg that contains extra Vitamin E, Lutein and Omega-3 essential fatty acids.

More recently, Pilgrim's Pride introduced its EatWellStayHealthy Kids line of heart-healthy products, the first in the industry to feature the USDA-regulated word "healthy" on its packaging, as well as the American Heart Association's "heart check-mark" seal of approval.

These innovations have earned Pilgrim's Pride numerous awards for quality and service from its customers, as well as accolades within its industry. Recent awards include the Distinguished Supplier Award from Darden Restaurants, the 2005 Vendor Partnership Award from Jack in the Box; the Poultry Supplier of the Year Award from Zaxby's, and the Outstanding Vendor of the Year Award from Fry's Food Stores, a division of The Kroger Co.

In addition, Pilgrim's Pride has been named among the "Most Admired Companies in America" by Fortune magazine for four consecutive years.

[image: Pilgrim's Pride]

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Anne Mulcahy and the importance of innovation at Xerox

In an interview for IDG News Service, Xerox chairman and CEO Anne Mulcahy discusses the importance of innovation to the company:

"I would say the most important way that we foster innovation is our funding of research, which so many companies have walked away from. We have four global research centers around the world that do everything from very upstream futuristic kinds for research, like [in] Palo Alto, to a media research center, like we have in Canada. There's a pipeline that has to be supported to get to innovation in the marketplace, and the commercialization of it begins with the stimulation of innovation proposals, and that's been a huge focus.

We have a head of technology today, her name is Sophie Vandebroek; she runs an innovation process in the company that I think yields really extraordinary results. She has upped the ante on the amount of innovation proposals, the amount of patent applications..."

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September 8, 2006

A new e-book on innovation strategies

Based on his analysis of companies commonly cited in the mainstream business media as being paragons of innovation goodness, Daniel Montaño of the User Experience + Innovation blog has just released an e-Book on Innovation Strategies. The book, which is currently available only as a 156-page PDF document, examines the innovation strategies at companies like Apple, IBM, GE, Target and Toyota:

"Rather than debate if those are really the most innovative companies in the world I decided to take a look at how each of these companies is innovating. The result is this book, where we find out some methods and strategies they are using, the kind of design awards they are winning, the type of criteria they're focusing on, where they're headed next, etc. The goal is to learn from those companies that spend thousands of dollars learning how to innovate, so others who don't have the budget can save some money and still innovate on the same tracks. Innovation is no longer just what happens in R&D, nor in the design shops, innovation is happening at every level of the organization. Every staff member can contribute to the innovation efforts."

Tags: innovation strategy tactics

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September 7, 2006

How MTV lost its creative mojo

Of late, the Wall Street Journal has been beating up on Viacom and its various media holdings. It's not hard to do, especially with the ongoing, highly-publicized spat between Sumner Redstone and Tom Cruise, the firing of CEO Tom Freston earlier this week and the growing realization that MTV Networks, the flagship cable network for the company, has lost its way. Today in the Wall Street Journal, there's a story called "Does MTV Still Rock?" that traces the slow, sad decline of MTV into a has-been network that doesn't even register on the radar of the MySpace/YouTube generation. Whereas once MTV was a poster child for the 18-to-34 demographic, it has apparently lost its creative mojo:

"MTV grew into a cultural juggernaut not just because it took risks on innovative content, but because its own culture was innovative, even subversive, say former MTV Network officials. Executives came to work late because they had been out partying with rock stars until the early hours - and that was fine because it fostered an atmosphere of creativity.

Many visitors to Viacom's 54-story Times Square headquarters are startled by the near total absence of corporate decorum. MTV Networks has no dress code and lacks many of the other regimens of corporate life. Mr. Freston (the departed CEO) believed that a relaxed atmosphere fostered creativity in his staff. As long as MTV was successful, the approach was embraced, even celebrated. But as the company grew older and larger, some former executives say it has become allergic to criticism. Management's decentralized approach has, at times, allowed problems to fester. The cadre of executives who founded the network have been reluctant to open their ranks to outsiders, institutionalized thought has crept in and management fiefdoms and silos have been created, former executives say."

Tags: MTV Viacom

[image: The day before the MTV Video Music Awards]

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